Benefit sanctions encouraging people to look for work harder, says Damian Green
Work and Pensions Secretary Damian Green has insisted benefit sanctions are encouraging people to "look for work harder" despite a scathing report by the public spending watchdog.
The National Audit Office (NAO) found that sanctions can plunge claimants into hardship, hunger and depression, and are being handed out with little evidence that they work.
But Mr Green claimed the system was working effectively, with sanctions halving since last year and statistics showing most people only receive the reprimand once.
He told the Commons Work and Pensions Committee: "The vast majority of the people who receive a sanction only receive one, which suggests to me, okay, you know, these people are taking this seriously, they are then complying, that's great, they can get their benefits.
"The other salient fact is that both JSA (jobseeker's allowance) and ESA (employment and support allowance) sanctions have halved since last year, which suggests to me... people say, okay, this is not just a paper exercise, I will get sanctioned if I don't look for work harder and then they start doing it to their own benefit, of course, because that gets them into work."
Mr Green also pointed to Department for Work and Pensions (DWP) research which showed that 70% of people receiving JSA, and 60% of those receiving ESA said the regime made them more likely to follow the rules.
But he revealed that the DWP was looking at whether the system could be reformed, with a trial of a so-called "yellow card" scheme in Scotland.
"We have trialled something like that in Scotland and we are evaluating it at the moment, we're looking at ways of improving sanctions," Mr Green said.
The DWP's leading civil servant, Sir Robert Devereux, suggested officials may look at extending from five days the time limit people have to reply to warning letters about sanctions .
Mr Green also defended the DWP against concerns raised in the NAO report over the costs of the scheme.
The public spending watchdog said the DWP has not used its own data to evaluate the impact of sanctions in the UK and does not track the costs and benefits of sanctions.
The DWP estimates that it spends up to £50 million a year applying sanctions and £200 million monitoring that claimants meet the conditions for receiving payments.
It withheld £132 million following sanctions last year and paid out £35 million in hardship payments, according to NAO estimates.
Mr Green told the committee: "The other point that the NAO makes, that you're saving this money and spending this amount of money - you can't say how much money you have saved by a sanctions regime precisely because the vast majority of people obey it.
"And we don't know, it's why we have law. Most people don't break the law but nobody says, well you can't say whether it's worthwhile having a legal system or not, of course it is, because it's just another encouragement to people."
Mr Green and Sir Robert also revealed they have not seen I, Daniel Blake, the Ken Loach film which Labour has used as a campaigning tool against disability benefit cuts.
The NAO report also warned that use of the penalties varies "substantially" across the country and referral rates have changed significantly over time.
It accused the DWP of not doing enough to find out how sanctions affect people on benefits.
MPs said the findings showed it was "pot luck" which people were sanctioned and demanded ministers "get a grip" of the "discredited" system.
Labour's Meg Hillier, who chairs the Public Accounts Committee, said: "Benefit sanctions punish some of the poorest people in the country. But despite the anxiety and misery they cause, it seems to be pot luck who gets sanctioned.
"While studies suggest sanctions do encourage some people back into work, other people stop claiming but do not start working and the Department for Work and Pensions has no record of them. If vulnerable people fall through the safety net, what happens to them?"
More than one million unemployed benefits claimants have to meet certain conditions, such as showing they are looking for work, to receive their payments.
The report found the use of penalties differs across jobcentres and employment schemes.
Some Work Programme providers make more than twice as many sanction referrals as others dealing with similar groups in the same area, it said.
More than a quarter of Work Programme claimants hit by sanctions last year had their decisions overturned compared to 11% of jobcentre penalties, it added.
Liberal Democrat leader Tim Farron said: "This report is a civil service equivalent of a character assassination. It shows that a failing department is trying to prop up a discredited system.
"Ministers need to get a grip."
Nearly a quarter of JSA claimants received at least one sanction in the five years to 2015, according to the NAO. A four-week penalty for the over-25s means a £300 loss.
In its report, the watchdog said the department "needs to do more than react to problems" and ruled that it "cannot conclude that the department is achieving value for money".
Labour's Frank Field, Work and Pensions Committee chairman, said: "We do not know how many people are being pushed permanently outside the benefits system, for example, leading to some being totally disconnected from both work and welfare, and left destitute."
Shadow work and pensions secretary Debbie Abrahams described the report as "damning" and criticised the "punitive" sanctions regime.
She said: "Labour has repeatedly called on the Government to have an independent review of benefit sanctions and the NAO also makes this recommendation.
"The huge scale of delays in Universal Credit (UC) sanction decisions is more evidence of the Government's chaotic roll-out of their failing flagship programme. It is a real concern as more benefits migrate to UC.
"It's time the Government looks again at their sanctions regimes and ensures fairness and financial sustainability for both claimants and the Government."
The chief executive of the Employment Related Services Association (Ersa), Kirsty McHugh, called for "fundamental reform".
"We strongly believe that employment support works best when there is a relationship of trust between jobseeker and adviser and that the threat of sanctions can undermine this positive relationship," she said.
"Ersa backs the introduction of simple changes, including introducing a warning system for a first offence and providing employment advisers on contracted programmes with more discretion not to have to report back on clients to JobCentre Plus."
Child Poverty Action Group chief executive Alison Garnham said: "Sanctions create destitution but the DWP is operating almost blind."